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Carmaker Rejects Thales, EADS Merger

March 4, 2005

DaimlerChrysler, a major shareholder in the European Aeronautic Defence and Space Company (EADS), ruled out Friday the idea of a possible merger between EADS and the French defense technology group Thales. DaimlerChrysler holds around a third of EADS, as does the French group Lagardere and the French state. The remainder is traded on the stock exchange. Paris has been pushing for a possible merger between EADS and Thales. But Germany has strongly objected the tie-up plans because it would give France a bigger weighting in the shareholder structure of a merged group. In an interview with the Financial Times Deutschland on Friday, DaimlerChrysler chief Jürgen Schrempp rejected the idea of a full-fledged merger. "There are some areas where EADS and Thales could cooperate. But I don't see any point in a merger, either from a shareholder's point of view or from a strategic viewpoint," Schrempp said. The German-US auto maker also intended to hold on to its stake in EADS, even if aerospace is no longer regarded as a core area of business for DaimlerChrysler, Schrempp said. "If I look at EADS from a shareholder's point view, I see no reason for us to separate. EADS is creating value for this company," he said.

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